Correlation Between Vanguard Intermediate and First Trust
Can any of the company-specific risk be diversified away by investing in both Vanguard Intermediate and First Trust at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vanguard Intermediate and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Intermediate Term Corporate and First Trust Exchange Traded, you can compare the effects of market volatilities on Vanguard Intermediate and First Trust and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vanguard Intermediate with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Intermediate and First Trust.
Diversification Opportunities for Vanguard Intermediate and First Trust
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and First is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Intermediate Term Cor and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange and Vanguard Intermediate is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vanguard Intermediate Term Corporate are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Exchange has no effect on the direction of Vanguard Intermediate i.e., Vanguard Intermediate and First Trust go up and down completely randomly.
Pair Corralation between Vanguard Intermediate and First Trust
Given the investment horizon of 90 days Vanguard Intermediate Term Corporate is expected to generate 0.89 times more return on investment than First Trust. However, Vanguard Intermediate Term Corporate is 1.13 times less risky than First Trust. It trades about 0.05 of its potential returns per unit of risk. First Trust Exchange Traded is currently generating about 0.03 per unit of risk. If you would invest 7,284 in Vanguard Intermediate Term Corporate on August 26, 2024 and sell it today you would earn a total of 818.00 from holding Vanguard Intermediate Term Corporate or generate 11.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.16% |
| Values | Daily Returns |
Vanguard Intermediate Term Cor vs. First Trust Exchange Traded
Performance |
| Timeline |
| Vanguard Intermediate |
| First Trust Exchange |
Vanguard Intermediate and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Intermediate and First Trust
The main advantage of trading using opposite Vanguard Intermediate and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Intermediate position performs unexpectedly, First Trust can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in First Trust will offset losses from the drop in First Trust's long position.| Vanguard Intermediate vs. Senstar Technologies | Vanguard Intermediate vs. ImmuCell | Vanguard Intermediate vs. Anika Therapeutics | Vanguard Intermediate vs. Aquagold International |
| First Trust vs. Vanguard Long Term Treasury | First Trust vs. Vanguard Short Term Treasury | First Trust vs. Vanguard Intermediate Term Corporate | First Trust vs. Vanguard Mortgage Backed Securities |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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